Report says Bateman was 'potentially misleading' in old Berwick school redevelopment

By Oliver Jenkins

ojenkins@fosters.com

Thursday, November 1, 2012

BERWICK, Maine — A third-party investigation commissioned by the Board of Selectmen regarding the Sullivan Street School redevelopment project ultimately cited a combination of inadequate, inaccurate, and at times, absent communication as the primary factors surrounding the controversial project.

“Having the benefit of hindsight, it appears that many of the problems that arose throughout this process resulted from inadequate communication,” writes Leah Rachin, an attorney for the Kennebunk-based firm Bergen & Parkinson, LLC. “The evidence indicates that in some circumstances, there was an absence of communication. It appears that certain important information about Bateman’s low-income housing tax credit application was not brought to the Selectmen’s attention. Moreover, there appears to have been little, if any, communication between the Board of Selectmen (BOS) and Planning Board regarding the BOS’s early interactions with Bateman and the Planning Board’s initial review of the project.”

Dated Oct. 22, Rachin’s 42-page investigative report highlights a multitude of issues that came into play after Berwick and Bateman Partners LLC initially began talks back in January 2008. Although a number of issues are ultimately cited throughout her report, Rachin faults Bateman for a number of inaccuracies throughout the project’s development.

“The evidence lead me to conclude that certain information Bateman provided was incorrect and potentially misleading,” Rachin writes in her conclusion.

“I find that the information Bateman provided to the Town regarding the targeted income levels of the tenant population was potentially misleading. In addition, the evidence suggests that Bateman exceeded the scope of its planning board approvals by including three-bedroom units in its application to the Maine State Housing Authority,” Rachin writes in another section of her report. “Moreover, I find that Bateman’s attempts to have the former Town Manager approve certain changes to its approved plan — rather than going back to the planning board — was contrary to the requirements of the Town’s land use ordinance.”

Specifically, opponents of the project have contended Bateman publicly asserted the redevelopment was targeted for households with incomes between 50 to 60 percent of average medium income. Opponents have said this information isn’t factually accurate. And based on evidence gathered, Rachin ultimately concluded that these opponents are correct.

Specifically, Rachin’s report indicates Bateman filed an application through MSHA for LIHTC financing that included a section entitled, “Income Targeting/Affordability.” This application, which was filed on Oct. 28, 2010, outlines that at least 60 percent of total units would be occupied by households with incomes at or below 50 percent of average medium index (AMI). The remaining percentage of units would be reserved for households with incomes at or below 60 percent of AMI — criteria that ultimately specifies a maximum — but not a minimum — threshold for tenant eligibility.

“Based on the available evidence, I conclude that Bateman inaccurately represented the income levels of the project’s target population,” Rachin writes. “The statement that ‘the program was designed to serve persons whose income is at 50 to 60 percent AMI’ conveys the impression that tenants’ income levels will be higher than what they are actually permitted to be under the terms of Bateman’s LIHTC approval. While it is true that a certain percentage of the targeted population falls within the 50 to 60 percent range — 38 percent — a substantially larger proportion of the targeted population falls within the 0 to 50 percent range to 68 percent.”

Rachin also states that evidence suggests Bateman was advancing two different sets of plans during the same period of time. One set of plans, which showed three-bedroom units, was presented to MSHA while another set of plans, showing no three-bedroom units, were presented to the town.

Rachin’s report states it was beneficial for Bateman to submits plans containing 3-bedroom units to MSHA because by doing so, Bateman could secure six points on its LIHTC application. On the other hand, it was beneficial for Bateman to submit plans containing fewer bedrooms to the town because the potential municipal impact would be less.

“Based on the foregoing, I believe it is reasonable to conclude that Bateman exceeded the scope of its planning board approvals by including 3-bedroom units in the plans it presented to MSHA — particularly because Bateman represented to MSHA in its LIHTC application that all necessary local approvals had been obtained,” Rachin states.

The report also agrees with opponents of the project who have continually argued the number of bedrooms is a relevant concern because the development could have an unreasonable adverse impact on municipal services, such as schools. Given that the bedroom reconfiguration could reasonably result in children in the school system, Rachin concluded that the number of bedrooms was a relevant factor for the Board’s consideration. “Moreover, 9.8(D) requires that any change to a plan must come back to the planning board for approval,” she states. “As a result, I conclude that the change in the number of bedrooms required planning board approval.”

However, Rachin also dismisses several allegations against Bateman she found to be unsubstantiated. Further, poor communication between selectmen, the Planning Board, and other Berwick officials are cited in her report as additional areas of concern.

First, Rachin states available evidence did not suggest Bateman misled the public into thinking the project would be elderly housing. A frequently expressed frustration by those who oppose the project is that they voted to approve the 75-year lease at the Nov. 3, 2009 town meeting because they were led to believe the project would be for elderly housing.

However, although citizens may have believed the project would be for elderly housing based on early conversations with Bateman, Rachin states the evidence did not support a conclusion that Bateman actually misrepresented the project would be used for such purposes. “While the evidence suggests that elderly housing was discussed as a possibility, citizens recognized that it was never actually promised,” Rachin wrote. “Moreover, there is evidence to suggest that Bateman may have specifically indicated in a public meeting that the project would not be for elderly housing before the town meeting to vote. It would not be reasonable to conclude that Bateman intentionally misled the public into believing the project would be for elderly housing.”

Further, opponents had asserted Bateman was not straightforward with the town about the project’s future population — an allegation Rachin disagreed with in her report. Although these individuals reported feeling misled by Bateman because they were not aware preferences would be given to displaced, homeless, or people with mental or developmental disabilities, Bateman actually stated at a BOS meeting on July 20, 2010 they would get more points for their LIHTC application if they gave a 20 percent preference to these individuals.

“Bateman specifically stated at a public meeting that ‘we will include this in our application,’” Rachin’s report says. “Based on this evidence, it would not be reasonable to conclude that Bateman misled the public in this regard.”

Overall, many of the lapses in communication were the result of a project that proceeded along three different trajectories — with the BOS, with the Planning Board, and with the day-to-day administration of the project, such as the former town manager and various town staff.

“This communication gap was a natural consequence of the practical realities of how municipalities work,” Rachin writes in her conclusion. “This project is a case study in why it is critical for developers to communicate effectively with municipal boards, officials, and the public — and — for municipal boards and officials to communicate effectively with each other, particularly when dealing with large-scale projects of townwide significance.”

Rachin concludes by suggesting the town focus it resources on dealing with litigation before proceeding with any other options that may be available.